Mortgage interets

Forum|Forum|4 years ago
March 7, 2022
1 reply
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We refinanced in 2021 and took a first mortgage on house and a HELOC. Paid off mortgage on second home. My interest deduction is not for full amount of interest paid. It is short from interest paid on all loans secured by property. Why am I not getting full amount of interest paid as a deduction?

Vanessa A

Did you answer the question "was this money used to buy, build or purchase the home that secures the loan" and answer that you paid off a mortgage on another home? If so, TurboTax calculated the amount that was not used to buy, build or secure the home.

Since at least part of the HELOC was not used to buy, build or improve the home the mortgage is taken out on, the interest is not fully deductible. That is why you would not be getting the full deduction.

"Interest on home equity loans and lines of credit are deductible only if the borrowed funds are used to buy, build, or substantially improve the taxpayer’s home that secures the loan. The loan must be secured by the taxpayer’s main home or second home (qualified residence), and meet other requirements." Pub 936

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